Real estate attorneys aren’t always the most popular people on the block. Hey, I’m a lawyer, so I fully appreciate why some people don’t like us. We’re expensive, we’re often difficult to get a hold of, and when we do call you back, we don’t always tell you what you want to hear. Sometimes, we can be the harbinger of some pretty bad news all around. But the fact is, your real estate attorney does have your best interests at heart (we’re ethically required to), and having one at your side can actually make buying or selling a home go much more smoothly.
But you also need to understand a few things about what we do. From things I’ve seen in my own practice, and from conversations I’ve had with other real estate lawyers, here are five things your lawyer wishes you knew—before you ever even contact them. Your own legal eagle may not clue you in to these matters, but we’re here to give you the inside scoop. And we’re waiving the hourly fee!
1. Don’t wait to call a real estate attorney
A common question I get from prospective clients is, “I signed a contract, and I want to get out of it. What can you do for me?” Or, “A court entered a judgment against me six months ago, and now I want it to go away. What can I do to avoid paying it?”
In either case, my response is “Not much.”
I should have been involved before the problem came up, not after. This is simple reality—and it’s often ignored.
I get it: A good real estate attorney is probably going to run a couple of thousand dollars. (It could be more or less depending on the circumstances of the transaction.) You might cringe at your mounting home-buying costs, but let’s look at the flip side: You purchase a home without hiring an attorney, and let’s just say, for instance, that a tax lien goes undiscovered. You’re now the owner of the home and on the hook for several thousand dollars in old tax debt, and you risk possible foreclosure.
That’s a very big, very expensive headache, and now you’re definitely going to need a lawyer to sort it out. And all of it could have been easily avoided by making that call upfront to a real estate attorney. We cost money, but we save you money.
2. But make sure to hire a real estate attorney
This seems like common sense, but it’s still a frequent mistake that home buyers make. Your frat house pal from college might be an outstanding criminal defense attorney in Illinois, and he might even be licensed in multiple adjoining states. But that doesn’t mean he knows the first thing about real estate closings in Indiana.
Far too often, home buyers will go with attorneys they know or are recommended by friends, regardless of said attorney’s specific area of expertise. Real estate law is complex—and getting more so—and laws and customs can vary widely from state to state, so it’s critical to go with an attorney who has experience with real estate law in the area in which you’re looking to buy. Often, finding the right attorney can be as simple as researching him or her on Google. Do it.
3. Attorneys can do things real estate agents can’t
Some states require that an attorney be involved in a real estate closing, while other states let real estate agents prepare purchase contracts without any involvement from attorneys. Typically the buyer pays for a real estate attorney.
In most cases, an attorney is going to act more like a referee, ensuring that everything follows the law. But if you ‘re looking to add unusual terms to a purchase agreement, or if you’re worried about a specific legal issue, an attorney can provide legal advice that a real estate agent can’t. If your impending deal includes even a whiff of beyond-the-ordinary complexity, make sure to have a lawyer present, regardless of whether it’s mandated by the law. Please.
4. Real estate attorneys are helpful for sellers, too
Sellers are less likely to seek assistance from a real estate attorney, but an attorney can be a godsend for especially knotty transactions.
Let’s say you own a large plot of land and want to sell only a couple of acres. A real estate attorney can help you draft a covenant that will restrict how the new owner can develop the land, or make sure that you are granted an easement to pass through the land to access a public road or another part of your property.
An attorney can also help owners understand and prepare for the full array of tax consequences of selling their home. You might know that single sellers can exempt up to $250,000 from capital gains tax, and married couples can exempt up to $500,000. But that doesn’t include selling costs, closing costs, or the home’s tax basis. Confused? A real estate attorney can help you navigate these waters—accurately calculating your gains and saving you quite a bit of tax money along the way.
5. Spoiler alert: Real estate attorneys actually do a lot of work
If everything goes smoothly with your home purchase, your attorney will come back and tell you to go through with the deal without any further changes. You may wonder what you just spent a couple of thousand dollars on, but a lot of behind-the-scenes work goes into making sure you have peace of mind and a secure future for the biggest financial decision of your life.
Thanks to your real estate attorney, you’ll be able to rest assured there are no problems with the title and that the terms of the purchase agreement are fair to you. Property law can be rather archaic and often still requires delving into county records that haven’t yet been digitized, so it isn’t exactly easy work either.
See? Attorneys aren’t so bad. Some might say we’re even kind of useful. Lovable, even.
Provided by Warren Christopher Freiberg from Realtor.com